West Virginia needs the Biden energy agenda
The policies Democrats are discussing for the reconciliation bill will benefit Manchin's state enormously -- and its voters support those policies.
As we speak, Democrats in Congress are hashing out the details of the budget reconciliation bill that will contain the vast bulk of President Joe Biden’s domestic agenda. It is meant to be passed alongside the recent bipartisan infrastructure package that came out of the Senate.
One of the unique features of this political moment is that virtually every individual Democrat has the power to sink the whole enterprise — there are zero Dem votes to spare in the Senate and only a handful in the House — but if any of them sink it, it all goes down. If progressive Dems kill the bipartisan infrastructure bill, conservative Dems will kill the reconciliation bill, and vice versa. (House Speaker Nancy Pelosi recently agreed to hold a vote on the bipartisan bill on Sep. 27, but progressives have pledged not to vote for it unless reconciliation also gets a vote.)
They either all succeed together or all fail together. And if they fail, the party will get crushed in 2022 and 2024. None of them will escape unscathed. They’ve got to make it work.
For obvious reasons, there’s an enormous amount of speculation about how various Democrats will play their hands in these negotiations. I can’t claim to understand the motivations of everyone involved. The recalcitrant House “moderates” are some mix of irrational and malicious. Sen. Kyrsten Sinema is utterly opaque.
But Sen. Joe Manchin makes sense to me, for the simple reason that I believe he has West Virginia’s best interests at heart. And that’s why I’m confident he’s going to find his way to supporting an ambitious reconciliation bill. He knows West Virginia needs it.
The simple fact is, West Virginia’s energy economy is not on a sustainable course. US coal is on the way out.
This is true across the country and it’s true in West Virginia. One of the state’s two big utilities, American Electric Power (AEP), will shut down 5,574 megawatts of WV coal generation by 2030, and the rest of it by 2040. The other, First Energy, has pledged carbon neutrality by 2050. The number of US coal mines continues to fall.
Many of the states biggest private sector employers, like Walmart, Kroger, Lowe’s, and Proctor & Gamble, have set aggressive emission-reduction goals and are looking for clean electricity (which they must currently purchase out of state).
The people of West Virginia largely understand that an inexorable energy transition is underway. They are scared it will leave them and their communities behind.
West Virginia needs new investment and new jobs. They need leadership. Passing some version of Joe Biden’s American Jobs Plan (AJP) would be an enormous boon to the state and a political win for Joe Manchin.
The American Jobs Plan would invest in West Virginia
Last week, the Center for Energy and Sustainable Development at the WVU law school released a new analysis showing what a few key provisions of AJP would do for West Virginia’s economy. (It builds on a previous analysis demonstrating the feasibility of rapid decarbonization in the state.)
Specifically, it models a “Clean Innovation Pathway” that would reduce carbon emissions from the state’s electricity system roughly 80 percent by 2030, taking into account two key policies from the AJP: extension/expansion of the clean-energy tax credits and the 48C Advanced Manufacturing Tax Credit, which invests in clean-energy manufacturing projects.
Through 2040, the Clean Innovation Pathway reduces the cost of electricity by $855 million and increases employment by the equivalent of 3,500 full-time jobs, while pulling in $20.9 billion in investment in new solar, wind, energy storage, and other clean-energy projects.
If Manchin’s American Jobs in Energy Manufacturing Act (which would expand 48C) were passed as part of the AJP, it would draw an additional $1.7 billion in manufacturing investments and create an additional 3,250-4,350 manufacturing jobs (plus 9,300-12,400 jobs created indirectly).
Importantly, these numbers capture only a fraction of the AJP’s benefits to West Virginia. There are other investments in Biden’s plan that would land in the state.
Carbon capture, utilization, and storage (CCUS) would get money for demonstration projects; money for a series of “pioneer projects” applying CCUS to steel, cement, and other heavy industrial plants; and a tax credit for carbon capture and storage.
There’s money for economic development in coal country, reclamation of mines and wells, weatherization of buildings, regional innovation hubs, and much else that would channel investment into the WV energy sector.
Perhaps most importantly: the analysis, done back in April, does not take into account the effects of a Clean Energy Payment Program (CEPP), which would offer federal payments to utilities that increase their deployment of clean energy — whether it’s solar, wind, geothermal, hydrogen fuels, or natural gas with carbon capture — and levy fines on those that fell short.
In effect, federal revenue would pay for West Virginia’s transition to clean energy, rather than the bill falling on state ratepayers. By doing so, it would generate vast in-state benefits — in air quality and other health improvements, in jobs, in innovation and entrepreneurship — that would dwarf those of the other policies, at little cost to the state. (Precisely quantifying the benefits will have to wait on analysis of the final proposal, which I’m told is forthcoming.)
If you add it all up, the AJP offers West Virginia tens of billions of dollars in federal investment to help kickstart an energy transition in the state. It’s an opportunity that won’t come along again any time soon.
Manchin knows an energy transition is necessary, and that it’s underway elsewhere. He doesn’t want his state to get left behind.
That’s what his constituents fear: being left behind. If they’re going to embrace an energy transition, they need to hear from leaders they trust, like Manchin, that it’s possible.
West Virginians are nervous about the energy transition
In national political circles, West Virginia is thought of as a red fossil-fuel state, which everyone takes to mean that the WV public supports fossil fuels and will fight any policy that hurts them.
Polling shows things are not that simple.
Recently the Nature Conservancy and the West Virginia Chamber of Commerce sponsored some detailed polling of West Virginians’ views on their energy future. (The polling, conducted by Research America, deliberately oversampled voters in coal country.) The results are fascinating.
WV voters know that the state currently depends on coal and that it is being hurt by a broader national shift to clean energy. Quoting from the local Weirton Daily Times:
When asked if respondents agree with the statement that coal is the backbone of the state and that renewable energy is hurting mining jobs, 59% of statewide respondents and 59% of coal country respondents agreed. But when asked whether they agree that the economy is shifting away from coal and fossil fuels towards clean and renewable energy sources, 69% of statewide respondents and 73% of coal country respondents agreed.
They know (67 percent) that coal is not clean. And they are not wedded to it: 90 percent see benefits in shifting the state’s energy system toward clean energy like renewables and carbon capture, 68 percent support federal investments in clean energy jobs, and 68 percent support federal investment in clean manufacturing.
What WV voters are wedded to is jobs. The poll asked about the most important thing politicians could do to help WV communities. Only 12 percent urged support of clean energy and only 14 percent urged support of coal. The overwhelmingly favorite answer, with 70 percent, was to bring more jobs.
It’s not difficult to pull a coherent narrative out of these results. The people of West Virginia know their state relies on coal, they know the nation in trending away from coal and toward clean energy, and they want to be a part of the transition, but they fear losing more jobs and economic development.
They need a trusted leader — Joe Manchin, for instance — to show them that the energy transition can bring them those jobs.
Data for Progress has also done polling in West Virginia which backs up these findings. While the answers reflect a predictable partisan split, clear majorities of WV voters support transitioning to a decarbonized energy grid, offering incentives for the purchase of low-pollution technologies, supporting displaced fossil fuel workers, and leading in a clean energy economy.
The latter two of these even draw support from a majority of Republicans. And even where there’s more opposition from Republicans, they are fairly evenly split.
The political term for this is “wedge issue” — Manchin has the support of virtually all of his party on an issue that splits the opposition party. The AJP is his chance to take advantage.
Manchin’s overwhelming interest, and West Virginia’s, lies in bringing federal investment to the state
Manchin has been using his position in the majority to do right by West Virginia. In the bipartisan infrastructure bill, he steered money toward big investments that will benefit his state, in clean manufacturing and industrial decarbonization, the Appalachian Regional Commission, broadband expansion, and more.
He has focused federal attention on WV coal communities, drawing state visits from Energy Secretary Jennifer Granholm and Labor Secretary Marty Walsh. He was instrumental in Biden creating a new White House Interagency Working Group on Coal and Power Plant Communities and Economic Revitalization and appointing West Virginia native Brian Anderson, director of the National Energy Technology Laboratory, to run it (and direct an initial $109.5 million in new investments).
But now, as I have written before, the national Democrats have reached what is likely their last chance to do anything big for a decade or more, and it is far and away the biggest thing they will do. Manchin has it within his reach to sign a bill that will draw tens of billion of dollars to his state, to help it kickstart an energy transition that both he and a majority of his voters recognize is necessary.
The alternative is … nothing. Republicans will never pass a bill like this. A Republican president might do more of what Trump did — rig the rules to allow fossil fuel companies to pollute a little more and draw a few more subsidies before they go under — but no Republican Congress is going to spend billions of dollars on West Virginia’s energy transition. It’s now or never.
Manchin can be a hero to his state or he can allow the work of his political career to flame out in a burst of recrimination and failure. I am confident he’ll make the right decision, for himself and for West Virginia.